)To encourage more sustainable energy

2)To encourage more sustainable energy

The energy systems are made up of energy networks and energy markets. The two are interrelated as networks are essential for the effective operation of the markets. The opening of the EU electricity markets, pursued by the third internal market package, contributes to both competition and security of supply and will be facilitated by the creation of the ‘European Network of Transmission System Operators¹⁵’ and the ‘Agency for Cooperation of Energy Regulators¹⁶’. In particular in the gas sector, the interconnections between national markets have to be improved and countries in the region need to gain access to new external sources. Reinforcing gas transmission infrastructure will be key for preventing potential supply disruption in the future. Well functioning networks, interconnections and interoperability are needed for energy security, diversification and effective energy operation.

In addition, all the countries of the Danube Region have policies to support the use of renewable energies. Many have large natural potential to develop renewables (especially solar and wind). They also have potential for improvement regarding energy efficiency in residential buildings, and district heating.

The Directive on renewable energy (2009/28/EC) sets ambitious targets for all Member States in order to ensure that the EU will reach a 20% share of energy from renewable sources by 2020 and a 10% share of renewable energy specifically in the transport sector. The Directive should be implemented by Member States by December 2010. The EU supports these policy goals through a significant contribution towards investment in renewable energy¹⁷.

Energy prices are high in the Region¹⁸. Much energy is imported, its transport is costly, the markets are fragmented. Energy infrastructures are not well interconnected. In addition, the Danube Region is specifically vulnerable regarding security of supply, as demonstrated in January 2009 when gas supplies were cut. Energy production and use is also a significant source of pollution.

Investment in infrastructure is a key priority. Cooperation is necessary in relation to planning, funding and implementation¹⁹. There are several EU policies supporting energy, in particular the Trans European Energy Networks programme (TEN-E), the European Energy Programme for Recovery²⁰, the third energy package, Renewable energy directive, the ‘Green for Growth Fund Southeast Europe²¹’ and the Europe 2020 Strategy. In addition, the Structural and European Agricultural Fund for Rural Development provide good funding opportunities for projects, in particular for decentralised production of energy from local renewable sources, and for research networks. Energy efficiency improvements and increased use of renewable energy are important for the whole area. The Danube Region has a high potential for improvement in energy efficiency, e.g. in residential buildings and district heating, as well as in combined heat and power facilities. There is also scope for a wider exploitation of geothermal resources for heating and cooling purposes as well as for energy production. Some countries have built up distinctive know-how regarding efficiency and renewables, which could now be usefully promoted and spread in the Region, as there is often a lack of expertise.

Regarding market organisation, cooperation helps to ensure security of supply, to balance supply and demand more effectively, and to realise economies of scale on investments. Regarding energy efficiency and renewable energy, there is potential to increase security of supply by reducing energy needs and increasing the share of energy produced (including small scale energy production at local level). Regarding nuclear energy, there must be respect for the high levels of safety established, especially where the river is an important source of cooling water.

Regarding energy infrastructure, the aim is to coordinate the long-term energy policies as well as the national investment strategies (power plants, grids, pipelines, interconnectors, etc.), taking into account where appropriate the Strategic Environmental Impact Assessments”. The Strategy should contribute to the 10-year network development plan as proposed in the internal energy package.

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  Action - “To develop a joint position of the region regarding the changes which could be introduced in the framework of the TEN-E Policy review and the modalities of the new Energy Security and Infrastructure Instrument, especially regarding the energy infrastructure gaps”. It will be in the interest of the region to ensure that the instrument supports projects and concepts of key importance to the region such as a north-south gas interconnection, investments in gas networks, investments in supply routes benefiting the region, etc..
  
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  Action - “To ensure that actions are coherent with the general approach of the Energy Community²² and explore synergies between the Energy Community and the Danube Strategy processes”. The Energy Community aims at extending the EU internal energy market to South East Europe (Parties: Albania, Bosnia and Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, Moldova, Montenegro, Serbia, and Kosovo²³; Participants: Austria, Bulgaria, Cyprus, Czech Republic, France, Germany, Greece, Hungary, Italy, The Netherland, Romania, Slovakia, Slovenia, and United-Kingdom as well as the European Union).
  
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  Action - “To enforce regional cooperation with a view to develop and implement the North-South gas interconnection projects”. The strategic concept of the North-South natural gas interconnection is to link the Baltic Sea area (Poland) to Adriatic and Aegean Seas and further to the Black Sea, covering the following EU Member States (Bulgaria, Hungary, Poland, Romania, Slovakia, Austria and the Czech Republic). This would provide the overall flexibility for the entire Central East European (CEE) region to create a robust, well-functioning internal market and promote competition. The concept would make the best use of existing and new import infrastructures, such as new LNG regasification plants and projects of the Southern Corridor.
  
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  Action - “To develop gas storage capacities”. A secure energy supply for Europe cannot rely on the construction of pipelines only. Additional flexibility through storage capacity is therefore necessary as well. Support should be given to the realisation of storage projects²⁴ to ensure that all countries of Central and Eastern Europe have adequate access to such facilities. The regional approach to planning the storage facilities should in particular apply to ensure that the new infrastructure is developed in the most efficient manner.
  

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  Example of project - “To implement the already agreed infrastructure projects on time, in particular the TEN-E and the European Energy Programme for Recovery projects in the Region, especially the important interconnectors and pipelines²⁵”.
  

Regarding energy markets, the aim is to establish an integrated and well functioning market for energy”. This should include better coordination of national energy strategies, measures to promote diversity of supplies and measures to improve the functioning of the energy market, a adequate legal framework, financial schemes based on public-private partnerships etc..

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  Action - “To tap possible cooperation opportunities with the Energy Community”, which aims in particular at creating an integrated energy market allowing for cross-border energy trade and integration with the EU market.
  
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  Action - “To cooperate to implement the Regional network integration and the New Europe Transmission System (NETS) in line with the feasibility study”. The harmonised operation of national transmission grids could alter the dynamics of south-eastern and central European gas markets by the time new gas sources (e.g. through the Southern Corridor) become available. The initiative to create a single network involves Bulgaria, Hungary, Romania, Serbia, Slovakia, Slovenia, Croatia and Bosnia-Herzegovina. The feasibility of the concept, including the commercial, regulatory and management issues possibly associated with NETS, is currently being studied.
  
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  Action - “To build a working relationship with the Central Eastern European Forum for Electricity Market Integration; this could be enlarged to neighbouring countries”. The integration of electricity markets and market platforms, as well as handling the generation capacity in the region, require specific harmonisation of legislation and market rules, which can be best coordinated at regional level. The following ‘Central Eastern European Forum for Electricity Market Integration’ (Austria, Czech Republic, Germany, Hungary, Poland, Slovakia and Slovenia) – “Heptalateral Forum” should be further developed.
  

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  Example of project - “To work together towards the implementation of the Coordinated Auction Office”. The Coordinated Auction Office (CAO) project implements the principles of Regulation n°1228/2003 on the harmonisation of congestion management and optimisation of cross-border capacity allocation. The Coordinated Auction Office in South East Europe is estimated to be operational in 2011. This office will manage auctions and load flows for the entire region of South East of Europe. In terms of operations, the principle of a one stop shop will apply.
  

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  Action - “To extend the use of biomass (e.g. wood, waste), solar energy, geothermal, hydropower and wind power”, especially by research and exchange of experiences / good practices / dissemination of information on related activities undertaken at national level. This would imply networking and cooperation between national authorities in order to promote awareness on renewable energy.
  

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  Example of project - “To foster the sustainable usage of biomass building on the ‘4Biomass’ project”. The Danube region has a high potential for biomass. As opposed to other renewable energy sources biomass is limited, which involves a danger of unsustainable production. In addition, competition of use between food and non-food applications arises. The ‘4Biomass’ project will address the implementation of national Biomass Action Plans and bioenergy policies by bringing together expert knowledge on the use of renewable energy sources and energy efficiency. Thus, this project will contribute substantially to the goal of 20% share of renewable energy sources to energy supply in Europe. (Lead: Germany, Deadline: September 2011)
  

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  Action - “To reinforce the Carpathian Convention to share best practices on using biomass for energy purposes”. The Carpathian Convention includes a provision that Parties shall pursue policies aiming at introducing environmentally sound methods for the production, distribution and use of energy, which minimises adverse effects on biodiversity and landscapes, including wider use of renewable energy sources and energy-saving measures, as appropriate.
  

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  Example of project - “To create a network to exchange experiences (and to test pilot projects or replicate existing good practices) in the fields of refurbishments and modernisation of small hydropower plants²⁶”. Practical experience has clearly demonstrated that refurbishment and modernisation of facilities in place may increase hydropower production while at the same time meeting modern environmental standards by being equipped with appropriate fish passes and residual water. (Lead: ICPDR and Austria, Federal Ministry of Agriculture and Forestry, Environment and Water Management; Deadline: December 2013)
  
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  Example of project - “To set-up a cooperation mechanism between the regions of the Alpine Convention and the regions of the Carpathian Convention for the transfer of best practices, best available technologies, environmental and social know-how”.
  

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  Action - “To implement the National Renewable Energy Action Plans and to prepare a Danube Region Renewable Energy Action Plan”. These should be prepared in light of a Strategic Environmental Impact Assessment where appropriate²⁷.
  
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  Action - “To explore the possibility to have an increased energy production originating from local renewable energy sources to increase the energy autonomy”. Energy autonomy not only diminishes dependency on energy import but creates also new jobs by requiring new energy production systems and increases the value of regional assets in a sustainable way as each region creates long-term energy sources without depending on others.
  
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  Action - “To develop a comprehensive action plan for the sustainable development of the hydropower generation potential of the Danube River and its tributaries (e.g. Sava, Tisza and Mura Rivers)²⁸”. The plan would pave the way for the coordinated and sustainable development of new power stations in the future and retrofitting the existing ones in the way that would minimise the environmental impact and the impact on the transportation function of the rivers (navigation). The options for using hydropower to respond to fluctuations in the electricity demand should be explored – using dams to maintain high water level in preparation for the demand peak.
  
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  Action - “To develop and set up pre planning mechanism for the allocation of suitable areas for new hydro power projects²⁹”. This pre planning mechanism and its criteria would pave the way for new hydropower plants by identifying the best sites balancing economic benefits and water protection. It should also take into account climate change impacts (e.g. lower or higher water levels). This should be based on a dialogue between the different competent authorities, stakeholders and NGOs. In the suitable areas, the permits process could be streamlined.
  
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  Action - “To promote energy efficiency and use of renewable energy in buildings and heating systems including by renovating district heating and combined heat and power facilities as required by Energy Performance of the Buildings Directive and Renewable Energy Directive”. This could be done through networks of best practices (e.g. sharing experience in successful use of the ERDF funds to support sustainable energy investments in housing) and cooperation with International Financial Institutions on facilitating the sustainable energy investments in housing. In that context, innovative financing instruments such as European Fund for Southeast Europe (EFSE)³⁰ as well as the recently launched Green for Growth Fund South East Europe (GGF) should be promoted and used widely.
  

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  Example of project - “To design and implement a research and development programme (including SMEs) for innovative, sustainable insulation material and other measures to improve energy performance in buildings”. This should be done making cooperative best use of existing know-how in the region. Eco-innovation could stimulate economic development with positive impacts on local employment, a wide range of industries and services, as well as the environment.
  
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  Example of project - “To explore the scope for sustainable hydropower development in the part of the Sava basin shared by Slovenia and Croatia”. The project will contribute to the achievement of the renewable energy objectives of the EU Energy and Climate Package, while respecting the water and nature legislation and taking into account other ancillary objectives. (Lead: Slovenia and Croatia)
  

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  Action - “To encourage the Energy Community members/ observers in adopting and implementing the Renewable Energy Directive”. Negotiations are underway to include RES directive in the ‘acquis communautaire’ to be implemented by Energy Community members within the framework of the Energy Community.
  
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  Action - “To facilitate networking and cooperation between national authorities in order to promote awareness and increase the use of renewable energies (biomass, solar, hydropower and wind) especially by research and exchange of experiences/ good practices/ dissemination of information on related activities undertaken at national level.
  

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  Example of project - “To build on the ‘Sustainable Energy Development Regional Initiative’ (SEDRI) project to promote energy efficiency”. The SEDRI project is a joint project of the Central Europe Initiative (CEI) and the Regional Cooperation Council (RCC). It aims to improve the legislative, institutional and regulatory frameworks for the development of the sustainable regional energy sector; to construct small-scale sustainable energy facilities in South-East and Eastern European countries; to foster a framework for regional cooperation in the field of sustainable energy development, including awareness raising, education, research and scientific cooperation. (Lead: Central Europe Initiative (CEI) and the Regional Cooperation Council (RCC))
  

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  Action - “To provide local authorities, businesses and citizens in the Danube Region consultative support with issues relating to mitigation of climate change and energy efficiency”. This could be done by setting up central competence and advisory centres (contributing to climate protection concepts, energy management, know-how transfer, training and public relations work).
  

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  Example of project - “To set-up a cooperation mechanism of cities and villages in the region with the view to commit to greenhouse gas emissions reduction, exchange best practices and test pilot projects on energy efficiency and renewable energy”. Cities and villages have specific energy needs due to the high energy requirement per square meter. The aim is to reduce the air pollution at local level and ultimately at the global level. Improvements could be e.g. district heating system based on waste incineration plants and high efficient cogeneration plants, development of district cooling technology as well as the implementation of innovative geothermal projects. In this regard consideration could be given to a wider participation in the existing Covenant of Mayors Initiative³¹, in the further development of the network of Climate Alliance³² and in the development of a network of cities working on renewable technologies. Developing the provision and innovative use of renewable energy sources in rural areas should be considered as well. (Lead: City of Vienna (to be confirmed))
  
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  Example of project - “To build on the ‘Renewable Energy Cooperation of Rural Areas’ (RECORA) project”. This initiative of seven partners from five countries (Austria, Germany, the Republic Czech, Hungary and Greece) has been supported by the EU programme INTERREG IIIC³³. The main focus lies on the economic utilisation of renewable energy resources and on the preparation of projects. New jobs have been created, alternative use of existing agricultural products have been processed, analyses of waste components (wood, grass, bio waste etc.) with regard to their usability in the energy production process have been developed and exchanged.